Globalization and the political role of the firm: implications for corporate governance

Present-day discussion of corporate governance is mainly centred on the relationship of shareholders and management. However, this view neglects the fundamental changes of the operating conditions of business due to globalization and the weakening of regulatory frameworks. These developments change the role of business, rendering it a political actor in part. Furthermore, the very assumptions of dominant corporate governance theory are challenged.

As a result, the legitimacy of corporations and of the economic system is at stake in many instances. Whereas in the traditional view, corporate governance safeguarded organizational legitimacy by assuring organizational efficiency and thereby contributed to societal welfare and the legitimacy of the economic system as a whole, this congruence is not seen when legal and regulatory frameworks are insufficient or absent.

Drawing on suggestions to restore organizational legitimacy by means of discursive processes, I argue that corporate governance needs to become open to such processes to safeguard organizational legitimacy and therewith the legitimacy of the economic system in a globalized world. Based on these considerations, I will introduce basic requirements as well as limits for modification of current corporate governance practice.

Biography of the Speaker

Anselm Schneider studied economics at the Freie Universität Berlin. Since 2008 he has been a researcher at the Center for Corporate Responsibility and Sustainability at the University of Zurich (CCRS) conducting research on Corporate Social Responsibility (CSR) and sustainability. As a doctoral student in the NCCR Work Package 1: Trade Governance, he is currently working on his PhD project 'Corporate Governance and Human Rights in a Globalized Economy' under supervision of Prof. Scherer at the University of Zurich.